Sawari Ventures” Ahmed El Alfi Highlights Funding Gaps and Urges Pivot to Deep Tech at Techne Summit
Egypt's entrepreneurship ecosystem is steadily approaching a self-sustaining cycle, driven by a new generation of founders who have successfully built and scaled startups to become mentors, investors, and board members. However, a persistent funding gap remains the critical missing link, according to Ahmed El Alfi, Founder and Chairman of Sawari Ventures.
Speaking at a Techne Summit panel titled 'What It Takes to Build a Lasting Venture Ecosystem,' El Alfi noted a significant demographic maturation in the market. The landscape has transitioned from fresh university graduates pitching graduation projects to seasoned professionals founding companies to solve real-world problems. Yet, while Egypt boasts an abundance of talent, the available venture capital is insufficient to support the sheer volume of viable projects.
**Regulatory Hurdles and Offshore Incorporation**
El Alfi highlighted major strides in public-private cooperation since 2010, citing regulatory milestones such as the legal integration of Employee Stock Ownership Plans (ESOPs). However, he pointed out ongoing friction within the regulatory framework, particularly regarding the speed of dispute resolution.
These systemic delays often prompt investors and founders to establish holding companies in jurisdictions like the Netherlands or Delaware to own their operational entities in Egypt. 'The ultimate goal must be to bolster investor confidence in the Egyptian legal system, regulations, and their application, encouraging direct capital injection into locally incorporated firms,' he emphasized.
**The Next Frontier: Deep Tech and Academia**
Looking ahead, El Alfi urged the ecosystem to move beyond iterative e-commerce and fintech models. With AI rapidly reshaping the landscape, he identified Deep Tech, advanced sciences, semiconductors, and biotechnology as the next wave of vital startups.
To achieve this, he called for bridging the gap between the venture capital world—such as Flat6Labs and Techne—and academic research institutions. He noted that many scientists lack the commercial support needed to transform their research and patents into fundable, scalable enterprises.
**Reversing the Brain Drain**
Addressing the migration of Egyptian talent to the Gulf and Western markets, El Alfi argued that expatriate remittances should not be the ultimate economic goal. Instead, the focus must shift to repatriating talent by offering robust intellectual property protection and adequate funding to match their ambitions. 'Talent naturally gravitates to where capital is concentrated,' he noted.
Reflecting on Sawari Ventures' pioneering journey, El Alfi explained how the firm launched the Flat6Labs accelerator to generate investable deal flow, and later the GrEEK Campus to physically house the burgeoning community. He concluded by welcoming the influx of new VC funds into Egypt, stressing that venture capital is highly collaborative; a larger pool of investors expands the funding base, empowering more entrepreneurs across the nation.